JLP’s Question(s) of the Day

March 6, 2006

Have you ever been asked to join a multi-level marketing company? If so, which one? Did you join? What was your experience?

Leave a comment regarding your MLM experience.

Personally, I hate MLM. I joined two in the past (AL Williams and Quixtar) and both were horrible experiences. AL Williams stunk because it wasn’t professional at all and I was quite young at the time. Quixtar wasn’t good because the products were WAY overpriced (gotta pay the upline). Also, we still had to go to Target to buy stuff that Quixtar didn’t sell so we didn’t see any point in ordering products and paying shipping on them when we could just pick everything up at the store.

Here’s an interesting Q&A on MLM. Also, here’s the FTC’s take on MLM, which offers eight tips for evaluating a MLM plan:

1. Avoid any plan that includes commissions for recruiting additional distributors. It may be an illegal pyramid.

2. Beware of plans that ask new distributors to purchase expensive products and marketing materials. These plans may be pyramids in disguise.

3. Be cautious of plans that claim you will make money through continued growth of your downline, that is, the number of distributors you recruit.

4. Beware of plans that claim to sell miracle products or promise enormous earnings. Ask the promoter to substantiate claims.

5. Beware of shills – “decoy” references paid by a plan’s promoter to lie about their earnings through the plan.

6. Don’t pay or sign any contracts in an “opportunity meeting” or any other pressure-filled situation. Insist on taking your time to think over your decision. Talk it over with a family member, friend, accountant or lawyer.

7. Do your homework! Check with your local Better Business Bureau and state Attorney General about any plan you’re considering – especially when the claims about the product or your potential earnings seem too good to be true.

8. Remember that no matter how good a product and how solid a multilevel marketing plan may be, you’ll need to invest sweat equity as well as dollars for your investment to pay off.

12 responses to JLP’s Question(s) of the Day

  1. Did Amway … way back when.

    It was a so-so experience. Glad I did it, if only for the “learning” that took place.

  2. Here is a great page made by Rob at Cockeyed.com about Herbalife:

    http://www.cockeyed.com/workfromhome/workfromhome.html

  3. I’m profoundly ashamed to admit that I joined Mary Kay. There’s not much to say about it except
    —dang, that was stupid.

  4. I was asked to join an MLM where you had to buy stuff from a catalog (normal house stuff & consumer elections, etc.) and you would (hopefully) get a certain percentage of the money back. You were supposed to make money by getting other people to sign up to do the same thing. I think the company was called AmWay. It was totally cheesy. About a year later I watched a feature on 60 minutes or 20/20 about how they were basically scamming people because the founders and big money makers made their money from selling motivational books and seminars – not the products in the catalog.

  5. A former boss “strongly suggested” I attend a Landmark Education seminar with him. What a load of sheep.

  6. I was a Tupperware “Lady” (interesting since my name is Matt). I cleaned up. The novelty of having a man demo Tupperware (and cooking for the mostly female audience at parties) was a great selling point. It was my ex’s ‘business’ so when we split up I quit doing it.

  7. I was approached by Quixtar people twice. The first time I even went to one of their free meetings before I realized that it didn’t feel right at all. The second time around I recognized all of the names and quickly let them know that I was not interested. I know they say it isn’t a pyramid, but it feels enough like a pyramid that I don’t like it. Being an “IBO” (Independent Business Owner) in my opinion adds no value to the people who actually purchase the products, and I hate how they refer to the savings one receives on their own purchases as income.

  8. I’m a fan of the system that is MLM. Theoretically it’s an incredible process of moving products to the end consumer and each distributor is able to make a percentage of their sales along the way.

    Unfortunately, the human element usually fails this and the people selling the company eg. Amway, Herbalife etc can sometimes be cheesy, pushy and damnright rude.

    Have an open opinion and check it out properly before getting involved in any business proposition.

    NB. I am not in any way part of any MLM anymore though I did do Omegatrend for 3 years in my late teens/ early twenties.

  9. There’s an interesting book called Multiple Streams of Income that did a nice job discussing the pros and cons of an MLM. I think if you pick a good company, it can be a terrific business but the product has to be something you really believe in. Incidentally, my mom did Amway when I was growing up but hasn’t been very active for years and still makes a decent amount of spending money (20 years later).

  10. I have never heard of Al Williams and Quixtar is an outright scam in my opinion.

    It’s funny. Most people know other people in Network Marketing and most people (like me) have an impression that most people do not make any money. However, most people also have no idea why.

    Some folks would make money in any business of this type, but the average person will not make money with a company that is flawed. Pick a % 90%+ of MLM companies are flawed. Find the % that are not flawed and [put in a reasonable effort and you would turn a profit.

  11. I have a joined a few MLM companies in the past, mostly as
    favors to friends. The only one I joined on it’s own merits was
    Pre-Paid Legal which I still believe strongly in. I literally
    sought them out and ask about marketing opportunities after
    the service was presented to me.
    It is not my full time business, but I do still sell memberships
    when I see the need and I make residual income on memberships from
    several years ago.
    The thing I hate about most MLM is all the hype and empty promises.
    Some Pre-Paid meetings are like that but I ignore it and appreciate
    the service and what it does for me and my customers.

  12. I’ve written a couple of posts about my experience in Amway
    here
    http://extremeperspective.blogspot.com/2007/01/is-quixtar-amway-bad-business.html

    and here
    http://extremeperspective.blogspot.com/2006/12/network-marketing-amway.html

    I’m not involved in Amway nor have been for over 15 years. However, I think all the comments here are off-base. None of the commmenters or JLP has taken the time to investigate the quality of this business nor the value of the products.

    MLM’s take a lot of work but so does any good business. My sense is that the price of entry is too cheap for most to take it seriously. Hence most simply dismiss the opportunity when they encounter their first small pebble.